Up to 3% of the world population is infected with hepatitis C virus (HCV), a hepatotropic RNA virus that causes acute hepatitis with frequent evolution into persistence that can further progress to cirrhosis and hepatocellular carcinoma. While the mechanisms of HCV persistence and liver disease progression are not fully known, virus-specific T cell response is an important determinant of HCV clearance and disease resolution. Thus, a vigorous and broad type 1 T, cell response is associated with spontaneous HCV clearance while a suppressed and dysfunctional response is observed in HCV persistence. In examining the immunological determinants in the outcome of HCV infection, our preliminary results demonstrated a link between HCV persistence and increased frequency of CD4+CD25+ regulatory T cells that can directly suppress HCV-specific type 1 CD8 T cell response and may include HCV-specific TGFb+ Th3, cells. HCV persistence was also associated with increased HCV-specific ILl0+ Trl cells. Based on these observations, our central hypothesis in this proposal is that HCV persistence and liver disease progression is mediated by the immunoregulatory CD25+ and ILl0+ T cells. This hypothesis will be pursued by the following interrelated Specific Aims: 1) The virological outcome of HCV infection is determined by immunoregulatory T cells; 2) Distinct HCV-specific CD4+CD25+ regulatory T cells are induced in HCV persistence. 3) Immunoregulatory T cells contribute to HCV-associated liver disease progression. The proposed studies will provide a better understanding of the immunological mechanisms of HCV persistence relevant in development of strategies to eliminate chronic HCV infection and prevent its long-term sequelae.